Last edited 07 Aug 2018

Due diligence when selecting contractors or subcontractors

Contents

[edit] Introduction

The financial failure of a contractor or key supplier can be catastrophic to a project.

To reduce exposure to risks it is important to have a thorough grasp of both the capability and financial status of a prospective organisation before appointing them.

Reliance on credit checks involving accounts filed at Companies House can be useful, as can assessments of past track record, but they have their limitations. It is important to understand where the organisation might be exposed to risks through commitments to, or reliance on, third parties, and how secure and well resourced they are given the size of the proposed contract and their other commitments.

The following issues should be evaluated against the proposed scope of works to be undertaken:

[edit] History

  • Track record and appropriate references.
  • Audited accounts.
  • Tax returns.

[edit] Current position

[edit] Future position

[edit] Legal position

[edit] Technical capability

[edit] Other indicators

[edit] Find out more

[edit] Step-by-step guidance on appointing a contractor:

[edit] Related articles on Designing Buildings Wiki